Surat DGGI Uncovers Massive Rs 450 Crore GST Fraud Network Across Gujarat
The Surat zonal unit of the Directorate General of GST Intelligence (DGGI) has made a significant breakthrough by exposing a sophisticated fake input tax credit (ITC) racket operating through a coordinated network of firms in Ahmedabad and Surat. In a major crackdown on Friday, authorities arrested three key individuals involved in this elaborate scheme that has defrauded the government of substantial revenue.
Rs 450 Crore Fake Billing Uncovered in Preliminary Investigation
Initial investigations have revealed staggering numbers in this fraudulent operation. The DGGI has uncovered fake billing amounting to approximately Rs 450 crore, with the GST component of this fraud estimated at around Rs 80 crore. This represents one of the substantial GST fraud cases detected in the region, highlighting the scale of organized tax evasion activities.
Three Firms Identified in Systematic Bogus Invoice Operation
Investigators have identified three primary entities involved in this racket:
- RT Enterprise of Ahmedabad
- Mangaldeep Inc of Surat
- Computronix Infotech Pvt Ltd of Surat
These firms were systematically issuing and circulating bogus tax invoices without any actual supply of goods, solely to fraudulently avail and pass on input tax credit. This activity constitutes a clear violation of the Central Goods and Services Tax (CGST) Act, 2017.
Notably, Computronix Infotech has been described as a market leader in IT infrastructure and computer hardware in Surat, operating for over two decades. This established business facade made their fraudulent activities particularly concerning and difficult to detect initially.
Three Key Arrests Made After Comprehensive Evidence Gathering
Following meticulous collection of documentary, digital, and oral evidence, the DGGI arrested three individuals central to this operation:
- Niral Shah, director of Computronix Infotech Pvt Ltd
- Jyoti Kumar Choraria, proprietor of Mangaldeep Inc
- Babulal Sharma, proprietor of RT Enterprise
Investigators have established that the alleged business operations were entirely fictitious. Despite extensive invoicing and return filing that suggested high-value commercial activity, there was no physical movement of goods whatsoever.
Sophisticated Money Laundering Techniques Uncovered
The fraudsters employed sophisticated financial techniques to create the appearance of legitimate trade. Funds moved through banking transactions across multiple accounts to simulate genuine business activity. After these transactions were recorded, funds were systematically withdrawn and routed back in cash through angadias (traditional couriers for cash transportation).
This circular movement of funds confirmed that the transactions were designed exclusively to generate and monetize ITC fraudulently, with no legitimate commercial purpose behind them.
Part of Larger Fraudulent Network with Expanding Implications
Authorities suspect this racket is merely one component of a much larger fraudulent ITC network operating across the region. The amount of fraudulent ITC involved in this particular operation is likely to increase manyfold once the entire chain is thoroughly investigated and all connections are uncovered.
Organized Economic Crime with Serious Consequences
Officials have emphasized that ITC fraud of this magnitude represents organized economic crime rather than mere technical or procedural lapses. By claiming tax credits without paying actual taxes, fraudsters directly drain public revenue, weaken the integrity of the GST system, and create unfair competitive disadvantages for honest businesses that comply with tax regulations.
This crackdown by the Surat DGGI unit sends a strong message about the government's commitment to combating GST fraud and protecting the nation's tax revenue. The investigation continues as authorities work to uncover the full extent of this fraudulent network and identify all parties involved.
